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         UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 15053 / September 17, 1996 
Accounting and Auditing Enforcement 
Release No.816 /  September 17, 1996

SECURITIES AND EXCHANGE COMMISSION v. MICHAEL ROSOFF, 96 Civ.
7064 (WK)  S.D.N.Y. 

     Michael Rosoff, former chief legal officer for the defunct
Towers Financial Corporation, was charged today with
participating in Towers' fraudulent sales of hundreds of millions
of dollars of promissory notes during the five years that Towers
was operating a huge Ponzi scheme.  According to the Commission's
complaint, Rosoff, who began working at Towers (or a predecessor
company) in 1980, participated in the preparation of false and
misleading offering documents distributed to purchasers of
promissory notes, including financial statements that
significantly overstated Towers' revenues from its collection
business.  The Commission has alleged that Rosoff knew that
Towers' method for reporting its collection revenues was not
supported by Towers' actual experience, and that Rosoff was also
aware that statements to investors about the promissory notes, in
offering documents he helped prepare, misleadingly described the
promissory notes as insured and fully collateralized.  It is
alleged that the proceeds from the promissory notes had been
squandered on Towers' bloated operating expenses and perpetuating
the fraudulent scheme.  The Commission has also alleged that
Rosoff was aware that bogus documents and testimony were being
provided to the Commission at a time when the promissory notes
were being sold.

     The complaint, which alleges violations of violations of
Section 17(a) of the Securities Act of 1933 and Section 10(b) of
the Securities Exchange Act of 1934 and Rule 10b-5 thereunder,
seeks a permanent injunction against Rosoff, disgorgement of
ill-gotten gains, plus pre-judgment interest, civil penalties,
and an officer-and-director bar.

     The Commission filed suit against Towers and other officers
in February 1993; in March 1993 Towers filed for protection under
Chapter 11 of the Bankruptcy Code.  The Commission's actions
against Towers and other individuals are described in Litigation
Release No. 13514. 

(SECURITIES AND EXCHANGE COMMISSION v. TOWERS FINANCIAL
CORPORATION, STEVEN  HOFFENBERG,  MITCHELL BRATER, AND ARTHUR J.
FERRO, 93 Civ. 0744 (WK)(S.D.N.Y.); Litigation Release 13550
(Amended Complaint); Litigation Release No. 14240 (SECURITIES AND
EXCHANGE COMMISSION v. MARVIN E. BASSON, 94 Civ. 6866 (WK));
Litigation Release No. 14246 (SECURITIES AND EXCHANGE COMMISSION
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v. CHARLES H. CHUGERMAN, 94 Civ. 6866 (WK)); and Litigation
Release No. 14317 (Consent Judgment entered against Steven
Hoffenberg).  See also News Release No. 94-09 (Hoffenberg
Arrested and Charged with Securities Fraud and Obstruction of
Justice).